NEW YORK

EMPLOYMENT LAWYERS

Class Action Lawsuits | Collective Action Lawsuits

New York Employment Law Attorneys

What is a Class Action?

A class action lawsuit has many advantages over filing as an individual. While each individual may only have a claim that’s too small to bring to court, the class of employees could have a large claim against the employer. This means that if an employer has wronged a large group of employees, the employer will be held responsible and made to pay damages.

What Does this Mean in Practical Terms?

This means that when an Employer is doing something to avoid paying all of the employees a small amount of money to each employee, for example, $10 each week, no one is going to be able to get a lawyer to sue for such a small amount. On the other hand, if the Employer has done this to 500 employees over a period of 5 years, ($10 x 500 employees x 52 weeks x 5 years), this comes out to $1,300,000.00. Employers do things like this all the time, because they correctly assume that no one will bother to do anything about it.

How Can We Find Out Who the Rest of the Employees Are?

In a class action, the Court will order the Employer to provide a list of the employees, the former employees, and their addresses.

What Do We Have to Do to Start a Class Action?

Someone, called the lead plaintiff, has to be willing to be named in the complaint. He/she can be either a current or a former employee. The lawsuit will then be filed as “John Doe, on Behalf of Himself and Others Similarly Situated”. After both sides exchange documents and testimony of witnesses is taken, we have to make a motion, to certify the class, which means asking the Court to allow the lawsuit to go forward as a class, with the lead plaintiff as the class representative, and with his/her attorney as Class Counsel. The Employer lawyers will either oppose this motion, or sometimes the case will be settled on a class basis.

Why Would the Employer Ever Want to Settle a Class Action?

Because in exchange for a known payment, it buys the Employer peace. When the Employer settles a class action with a large number of employees, it always gets what is effectively a bulk volume discount. As a practical matter, the company can settle the case with a very small payment to each employee, usually for less than the underpayment, if it is a large class, and a notice will go out to all of the class members as part of the settlement process. When this happens, everyone who is a member of the class, (in an employment case, everyone who appears in the Employer’s payroll records) will get a notice. They will be automatically bound by the settlement unless they affirmatively decide not to participate in the settlement, or “opt out”. This saves the Employer from death by a thousand scratches. For more information on this, see Why Should I Opt Out of a Class Action?

How Many People Do You Need to Have a Class Action?

Both the federal and state rules say there have to be enough members so that joinder of all of them is impracticable, (F.R.CIV.P. Rule 23, CPLR § 901), but in practice, and in both the federal and state decisions, 40 people is presumed to be enough. Getting enough people is called “Numerosity”. We are generally allowed to count the former employees who worked for the company during the six years before the filing date of the complaint in order to come up with the 40 people.

What Happens if We Don’t Have the 40 Employees?

If we don’t have the 40 Employees, we file what is called a FLSA (Fair Labor Standards Act”) Collective, 29 U.S.C. § 216(b). We start this the same way, by filing a complaint against the Employer in the name of the lead plaintiff, on behalf of the similarly situated employees. In practice, we often file the case as a Class/Collective Action, so we can automatically proceed as a collective if we don’t have enough employees for a class. Depending on the situation, the district we are in, and the judge, we might or might not be able to get preliminary certification of a collective action with only one employee or former employee. With several employees or former employees, we can always get preliminary certification as long as the employees have been harmed by the same policy and practice of the employer.

What Does Preliminary Certification of a FLSA Collective Action Mean?

It means that the Employer has to give us, the Plaintiffs’ attorneys, the list of the employees and former employees’ names and addresses. A notice, authorized by the Court, is then mailed out to all these people, letting them know what the lawsuit is about, and that they can join the lawsuit by putting their name on the form, signing it, and mailing it in.

What’s the Difference Between a Class Action and a Collective Action?

The biggest difference between a class and a collective is that a class includes all eligible class members unless they opt out. In a collective, you are not included unless you sign the form and send it in, so you will not be included in a collective action unless you take this action to “opt in”. In other words, if you do nothing, you will be included in, and bound by, a class settlement, but if you do nothing, you will not be included in a collective action settlement, nor will you get any money from it.

How is the Settlement Money Divided Among the Class or Collective Members?

In each case, a formula is arrived to divide the money. It can be based upon the tasks or job titles the various employees had, how much their hourly rates of pay were, how many hours of overtime they worked, how many weeks they worked, and various other factors. We generally devise this formula according to the facts of each case in order to be as fair as possible. Because the division of the money between the Employees is so important, the formula must be approved by the judge in each case. The payroll records of the Employees are generally provided by the Employer in an Excel spreadsheet format, and then given to the Settlement Claims Administrator, which is a company we pick to collect and distribute the settlement money to the employees. The Settlement Claims Administrator then does the calculations using the formula which has been approved by the court, and mails the checks out to the classs members. The lead plaintiffs usually get an additional amount, because the case would not have been possible without their cooperation. These payments are called “Service Awards” and must be approved by the Judge as part of the settlement.

Karma:

What was a small amount of money to the Employer might not have been so small to the Employee who is living from hand to mouth. Where the Employer has wrongfully deprived many employees of small amounts of pay, Class and Collective Actions serve a function of karmic justice. Don’t get mad – get even.

The law encourages you to assert your employment rights when you genuinely believe your rights are being violated. If you and your co-workers have been denied overtime, back pay or your employer has systematically made deductions from your pay that you did not agree to, contact the Law Offices of William Cafaro to discuss your potential claim. Your initial consultation is free, and you don’t pay any attorney fees unless we are successful in obtaining compensation for you. Contact us to learn more at (212) 583-7400.